Question:We have a situation where the borrower has PMI and they are at the automatic termination threshold where we would normally cancel the PMI. However, they are currently past due. Do we have to cancel it now, or would we be able to wait until they are current before cancelling PMI?

Answer:For automatic termination, the borrower has to be current per HOPA:“Automatic TerminationA servicer must automatically terminate PMI for residential mortgage transactions on the earliest date that both:• The principal balance of the mortgage is first scheduled to reach 78 percent of the originalvalue of the secured property (based solely on the initial amortization schedule, in the case of a fixed-rate loan, or on the amortization schedules, in the case of an adjustable-rate loan, regardless of the outstanding balance), and• The borrower is current on mortgage payments.”